contents · lt col abdul khaliq khan (retd) m. sohail khokhar director lahore: may 28, 2020 for and...

CONTENTS

Corporate Information

Directors’ Review

Condensed Interim Statement of Financial Position

Condensed Interim Statement of Profit or Loss

and Other Comprehensive Income

2-3

4-6

7

8-9

10

Condensed Interim Statement of Cash Flows

Condensed Interim Statement of Changes in Equity

Notes to the Condensed Interim Financial Statements

Directors’ Review (Urdu)

11

12

13-22

23-24

Auditor’s Report

2

CORPORATE INFORMATION

BOARD OF DIRECTORS

AUDIT COMMITTEE

HR & R COMMITTEE

TECHNICAL COMMITTEE

MANAGEMENT

COMPANY SECRETARY

AUDITORS

HEAD INTERNAL AUDIT

LEGAL ADVISERS

BANKERS

Mr. K. Iqbal TalibLt Col Abdul Khaliq Khan (Retd)Mr. Salman Hayat NoonMr. Saifullah Khan NoonMuhammad Sohail KhokharSyed Ali RazaMs. Maryam Mamdot

Syed Ali Raza

Mr. Salman

Hayat Noon

Mr. Saif Ullah Khan Noon

Ms. Maryam Mamdot

Syed Ali Raza

Mr. Salman Hayat Noon


Lt Col Abdul Khaliq Khan (Retd)

Mr. Salman Hayat Noon


Lt Col Abdul Khaliq Khan (Retd)Muhammad Sohail Khokhar

Lt Col Abdul Khaliq

Khan (Retd)

Muhammad Sohail Khokhar

Mr. Rizwan Sohail

(FCA)

ChairmanChief Executive / Director(Non- Executive Director)(Non- Executive Director)(Executive Director)(Non- Executive / Independent Director)(Non-

Executive

/ Independent Director)

Chairman

Member

Member

Member

Chairman

Member

Member

Member

Chairman

Member

Member

Member

Chief Executive Executive DirectorChief Financial Officer

Syed Anwar Ali

Shinewing Hameed Chaudhri & Co.,Chartered Accountants

Muhammad Ashfaq (FCMA)

Hassan & Hassan (Advocates)

Al Baraka Bank (Pakistan) LimitedAskari Bank LimitedBank Alfalah Limited – Islamic BankingBank Islami Pakistan LimitedDubai Islamic Bank Pakistan LimitedJS Bank LimitedMCB Bank LimitedMeezan Bank Limited

Standard Chartered Bank (Pakistan) LimitedUnited Bank Limited

HEAD OFFICE

REGISTERED OFFICE

SHARES REGISTRAR

MILLS

WEBSITE

4- Sarwar Road,Lahore Cantt.

Tel. # (042) 36655777 Fax # (042) 36662244

66-Garden Block,

New Garden Town,

Lahore.

Tel. (042) 35831462-3,

E-mail: [email protected]@gmail.com

Corplink (Pvt.) LimitedWings Arcade, 1-K Commercial,Model Town, Lahore.Tel. # (042) 35839182, 35916714, 35916719Fax # (042) 35869037, E-mail: [email protected]: www.corplink.com.pk

Bhalwal, District Sargodha.

www.noonsugar.com

3

102Days 105

630,929M. Tons 543,477

63,098M. Tons 52,788

10.01 %age 9.71

4.57% age 4.48

28,800 M. Tons 24,341

Operating period

Cane crushed

Sugar produced

Average sucrose recovery

Molasses recovery

Molasses Produced

2020 2019

Half Year Ended March 31st

4

DIRECTORS’ REVIEW

DEAR MEMBERS

The directors of your Company are pleased to present the condensed un-audited interim stfinancial information of the Company for the half year ended on March 31 , 2020.

FINANCIAL RESULTS

stA comparison of the financial results for the half year ended March 31 , 2020, as against March st31 , 2019, is as follow:

During the reporting period, the sales revenue of the Company was Rs. 2,354 million as compared to Rs.2,538 million for the corresponding period of the last year. Gross profit was Rs.459 million as compared to Rs.301 million in the corresponding period. Profit after taxation, for the period, is Rs.93 million against Rs.62 million of the same period last year and earnings per share is Rs.5.61 per share, as compared to the earnings of Rs.3.75 per share in the corresponding period of last year.

OPERATIONAL RESULTS

Sugar Division

The operational performance of Sugar segment for the period under review, with comparative statistics of last period are tabulated below:

(Rs. in millions)

Net sales

2,354

2,538

Gross profit 459 301

Earnings after tax 93

62

Basic earnings per share - Rupees 5.61 3.75

2020

stHalf Year Ended March 31 2019

5

2020 2019

Half Year Ended March 31st

Operating period Days 175 105

Ethanol produced

M.Tons

9,629

9,581

Average yield Ltrs./ M.Ton 250 258

Molasses Processed M.Tons 48,217 46,413

The current crushing season commenced on November 29, 2019. Your mills crushed 543,477 M.Tons of the sugarcane and produced 52,788 M.Tons sugar, with an average sucrose recovery of 9.71% in the 105 days operation as compared to 630,929 M.Tons of sugarcane crushing and 63,098 M.Tons of sugar production with 10.01% sucrose recovery in102 days' operation, in the corresponding period of last year.

The sugar production was adversely affected by a reduced availability of cane resulting from both the reduction in cane cultivated area and comparatively poor yield of sugarcane due to unfavorable weather. An intense competition for procurement of cane in a limited period of crushing season, resulted in a price war among the mills of area, with its negative effects on the cost of sugar production. It is however, hoped that barring any undue administrative intervention, a healthy trend in the sugar market will be maintained, to provide a much needed breathing space for sugar division of the industry.

Distillery Division

The operational performance of Distillery segment for the period under review with comparative statistics of the comparative period is tabulated below:

The Distillery plants processed 48,217 M.Tons of molasses and produced 9,629 M.Tons of ethanol with an average yield of 250 liters of ethanol per M.Ton of molasses in 175 days operation, as compared with 46,413 M.Tons of molasses processed and 9,581 M.Tons production of the ethanol at an average yield of 258 liters of ethanol per ton of the molasses, in 105 days operation, during the corresponding period of last year.

FUTURE OUTLOOK

Sugar Division:

A significant reduction in sugarcane cultivation in the area for two successive seasons, has raised serious concerns among the sugar mills. However, the high sugarcane prices during last crushing season brought a disproportionally high return to the sugarcane growers as compared to other crops which is likely to divert the grower towards cane cultivation. Consequently, a significant addition in cane supply areas is expected during both, spring and autumn plantation of cane.

6

Chief Executive

Lt Col Abdul Khaliq Khan (Retd) M. SOHAIL KHOKHAR Director

Lahore: May 28, 2020

For and on behalf of the Board

The management has already taken some aggressive supportive measures to provide all major agricultural inputs to the sugarcane growers of the area, to help them achieve good sugarcane yield from new improved varieties of cane. Your management is pleased to report a substantial increase in the mills operated sugarcane farms, and have developed a long term strategy for a further progressive increase in mills managed farms to multiply high yielding sugarcane varieties for supplementing the growers supply.

Distillery Division:

Due to Global Covid 19 Pandemic, the demand of the Ethanol has significantly increased, which has also led to a healthy trends in the ethanol prices in both, the international and local markets. We are hopeful that this trend will prevail in coming months for the distillery segment to improve your returns.

ACKNOWLEDGEMENT

The Board is thankful to all of its stakeholders for their consistent and invaluable continued support to the company. The Board would also like to place on record its appreciation to all the employees of the Company for their dedication, diligence and hard work.

7

Introduction

We have reviewed the accompanying condensed interim statement of financial position of Noon Sugar Mills Limited (the Company) as at March 31, 2020 and the related condensed interim statement of profit or loss and other comprehensive income, condensed interim statement of changes in equity, and condensed interim statement of cash flows, and notes to the condensed interim financial statements for the six months period then ended (here-in-after referred to as the "interim financial statements"). Management is responsible for the preparation and presentation of these interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these interim financial statements based on our review.

The figures of the condensed interim statement of profit or loss and other comprehensive income for the quarters ended March 31, 2020 and 2019 have not been reviewed, as we are required to review only the cumulative figures for the six months period ended March 31, 2020.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting.

The engagement partner on the review resulting in this independent auditors' review report is Mr. Osman Hameed Chaudhri.

INDEPENDENT AUDITORS' REVIEW REPORTTo the Members of Noon Sugar Mills Limited

Report on Review of Interim Financial Statements

Lahore: May 28, 2020SHINEWING HAMEED CHAUDHRI & CO.,

CHARTERED ACCOUNTANTS

Lt Col ABDUL KHALIQ KHAN (Retd) Chief Executive

8

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

Un-Audited Audited

March 31, September 30,

2020 2019

Note

200,000

165,175

249,217

514,449

928,841

150,000

9,797

45,926

205,723

5 354,220

14,780

73,118

6 2,402,453

118,008

5,100

2,798

106,413

3,076,890

3,282,613

Equity and Liabilities

Share Capital and Reserves

Authorised capital20,000,000 ordinary shares of Rs.10 each

Issued, subscribed and paid-up capital

16,517,453 ordinary shares of Rs.10 each

Reserves

Unappropriated profit

Non-current Liabilities

Long term finances

Lease liabilities

Staff retirement benefits - gratuity

Current Liabilities

Trade and other payables

Contract liabilities

Accrued mark-up

Short term finances

Current portion of non current liabilities

Unclaimed dividend

Unpaid dividend

Provision for taxation

Contingencies and commitments 7

4,211,454

The annexed notes form an integral part of these condensed interim financial statements.

- - - - Rupees in '000 - - - -

200,000

165,175

249,217

557,617

972,009

112,500

6,706

50,697

169,903

776,375

222,068

90,446

4,274,806

106,455

5,100

3,702

79,741

5,558,693

5,728,596

6,700,605

Chief Financial Officer RIZWAN SOHAIL

Director

M. SOHAIL KHOKHAR

9

Un-Audited Audited


2020 2019

Note

8 1,499,150 1,478,649

7,793 7,817

2,462 1,985

3,654 3,879

1,513,059 1,492,330

70,486 96,252

9 3,944,265 1,147,288

475,289 679,756

220,776 431,559

9,118 6,133

254,557 191,875

88,406 107,655

Assets

Non-current Assets

Property, plant and equipment

Investment property

Loans and advances

Deposits

Current Assets

Stores, spares and loose tools

Stock-in-trade

Trade debts

Loans and advances

Short term prepayments

Other receivables

Income tax refundable, advance income tax

and tax deducted at source

Bank balances 124,649 58,606

5,187,546 2,719,124


- - - Rupees in '000 - - -

6,700,605 4,211,454

AS AT MARCH 31, 2020

10

CONDENSED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (UN-AUDITED)

Lt Col ABDUL KHALIQ KHAN (Retd) Chief Executive Chief Financial Officer

RIZWAN SOHAIL Director

M. SOHAIL KHOKHAR

Note

10 989,849 1,216,059 2,353,866 2,537,685

(762,386) (1,070,303) (1,894,827) (2,236,217)

227,463 145,756 459,039 301,468

(19,708) (24,224) (69,680) (41,860)

(49,260) (38,204) (92,235) (70,330)

4,264 15,649 4,481 19,085

(2,603) (4,214) (6,279) (4,229)

160,156 94,763 295,326 204,134

(106,898) (84,634) (170,353) (142,133)

53,258 10,129 124,973 62,001

11 (12,363) 16,968 (32,253) -

40,895 27,097 92,720 62,001

-

-

-

-

40,895 27,097 92,720 62,001

Sales - net

Cost of sales

Gross profit

Distribution and marketing expenses

Administrative expenses

Other income

Other expenses

Profit from operations

Finance cost

Profit before taxation

Taxation

Profit after taxation

Other comprehensive income

Total comprehensive income for the period

Earnings per share - basic and diluted 2.48 1.64 5.61 3.75


- - - - - - - - - - - - Rupees - - - - - - - - - - - -

- - - - - - - - Rupees in '000 - - - - - - - -

March 31,

2020

March 31,

2019

Quarter ended

March 31,

2020

March 31,

2019

Six months period ended

FOR THE QUARTER AND SIX MONTHS PERIOD ENDED MARCH 31, 2020

11

CONDENSED INTERIM STATEMENT OF CASH FLOWS (UN-AUDITED)



M. SOHAIL KHOKHAR

March 31,

2020

March 31,

2019

- - Rupees in '000 - -

Six months period ended


Cash flow from operating activities

Profit for the period before taxation

Adjustments for non-cash charges and other items:

Depreciation on property, plant & equipment

and investment property

Gain on sale of operating fixed assets

Provision for staff retirement benefits - gratuity

Interest / mark-up income

Provision for slow moving stores

and spares inventory

Finance cost

Profit before working capital changes

Decrease / (increase) in current assets:Stores, spares and loose tools

Stock-in-trade

Trade debts

Loans and advances

Prepayments

Other receivables

Increase in trade and other payables

Increase in contract liabilities

Cash used in operating activities

Income tax paid

Staff retirement benefits (gratuity) - paid

Net cash used in operating activities

Cash flow from investing activitiesAdditions to property, plant and equipment

Sale proceeds of operating fixed assets

Long term deposits - net

Interest / mark-up received

Loans and advances - net

Net cash used in investing activities

Cash flow from financing activities

Long term finances repaid

Short term finances - net

Lease liabilities - net

Finance cost paid

Dividend paid

Net cash generated from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents - at beginning of the period

Cash and cash equivalents - at end of the period

356

170,353

379,301

78,614

-

6,024

(1,019)

25,410

(2,796,977)

204,467

210,783

(2,985)

(62,682)

422,155

207,288

(1,792,541)

(1,413,240)

(39,676)

(1,253)

(1,454,169)

(99,091)

-

225

1,019

(477)

(98,324)

(49,500)

1,872,353

(2,644)

(153,025)

(48,648)

1,618,536

66,043

58,606

124,649

124,973

937

142,133

280,263

71,851

(973)

5,000

(686)

28,029

(1,412,827)

(1,353)

21,337

410

(13,174)

243,252

193,284

(941,042)

(660,779)

(14,926)

(1,088)

(676,793)

(198,686)

1,100

1,496

686

(275)

(195,679)

(37,500)

1,095,468

10,865

(132,068)

(38,643)

898,122

25,650

46,008

71,658

62,001

FOR THE SIX MONTHS PERIOD ENDED MARCH 31, 2020

Balance as at October 01, 2018 (Audited)

Cash dividend at the rate of Rs.2.60

per ordinary share for the year

ended September 30, 2018

Total comprehensive income

for the period

Balance as at March 31, 2019 (Un-Audited)

Balance as at October 01, 2019 (Audited)

Cash dividend at the rate of Rs.3.00

per ordinary share for the year

ended September 30, 2019

Total comprehensive income

for the period

Balance as at March 31, 2020 (Un-Audited)

(42,945)

62,001

595,932

763,666

(49,552)

92,720

806,834

327,659

(42,945)

62,001

346,715

514,449

(49,552)

92,720

557,617

130,000

-

-

130,000

130,000

-

-

130,000

- - - - - - - - - - - - - - Rupees in '000 - - - - - - - - - - - - - -

Share

Capital Share

premium

Un-appropriated

profits

Capital Revenue

Reserves

Sub-total TotalGeneral

165,175 119,217 576,876 742,051

- - (42,945)

- - 62,001

165,175 119,217 761,107

165,175 119,217 928,841

-

- (49,552)

-

- 92,720

165,175 119,217 972,009


12

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)



M. SOHAIL KHOKHAR


13

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)


1. LEGAL STATUS AND NATURE OF BUSINESS

Noon Sugar Mills Limited (the Company) was incorporated in the year 1964 as a Public Company and its shares are quoted on the Pakistan Stock Exchange. The principal activity of the Company is manufacturing and sale of white sugar and spirit.

1.1 Geographical location and addresses of major business units including mills / plant of the Company are as under:

Sargodha Purpose

Bhalwal Mills / Production plant

Lahore4-Sarwar Road, Cantt, Head office

Karachi1st Floor, P.I.I.A Building, Mulana Deen Muhammad Wafai Road, Marketing office

2. BASIS OF PREPARATION

2.1 Statement of compliance

2.1.1 These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards applicable in Pakistan for interim financial reporting comprise of:

- International Accounting Standards (IAS) 34, 'Interim Financial Reporting' issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017;

- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under the Companies Act, 2017 have been followed.

2.1.2 These condensed interim financial statements does not include all the information and disclosures as required in an annual audited financial statements, and these should be read in conjunction with the Company's annual audited financial

14

statements for the year ended September 30, 2019. These condensed interim financial statements are being submitted to the shareholders as required by the section 237 of the Companies Act, 2017.

2.2 New standards, amendments to approved accounting standards and interpretations that are effective during the period

There are certain new standards, interpretations and amendments to approved accounting standards which are mandatory for accounting periods beginning on or after October 01, 2019 but are considered not to be relevant or have any significant effect on the Company’s financial reporting, except as mentioned below:

Adoption of IFRS 16 'Lease’

The Company has adopted IFRS 16, ‘Leases’ which replaces existing guidance on accounting for leases, including IAS 17 ‘Leases’, IFRIC 4 ‘Determining whether an arrangement contains a lease’, SIC-15 ‘Operating leases - incentive’ and SIC-27 ‘Evaluating the substance of transactions involving the legal form of a lease’. IFRS 16 has introduced single, on balance sheet accounting model for all lessees. Adoption of IFRS 16 resulted in almost all leases being recognised on the statement of financial position, as the distinction between operating and finance leases is removed. Under IFRS 16, a new concept of right-of-use leased item is introduced requiring recognition of right-of-use asset and a financial liability to pay rentals. The only exceptions are short-term and low-value leases.

The Company has applied IFRS 16 using the modified retrospective approach. Under this approach the cumulative effect of the initial application is to be recognised in the retained earnings as on October 01, 2019. Accordingly, the comparative information presented for September 30, 2019 need not to be re-stated i.e. it is presented, as previously reported under IAS 17. The adoption of IFRS 16 did not have a material effect on the Company’s financial reporting except for the reclassification of leased assets as right-of-use assets (refer note 8).

The Company has elected not to recognise right-of-use assets and its corresponding liabilities in respect of low-value leases and for the operating leases having a remaining lease term of 12 months or less.

2.3 Accounting policies

All the accounting policies and the methods of computation adopted in the preparation of these condensed interim financial statements are consistent with those applied in the preparation of annual financial statements for the year ended September 30, 2019.

3. ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of condensed interim financial statements require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

Judgments and estimates made by the management in the preparation of these condensed interim financial statements are the same as those that were applied to the financial statements as at and for the year ended September 30, 2019.

6. SHORT TERM FINANCES

From banking companies - secured

From a related party - unsecured

Temporary bank overdraft

Note

6.1

6.2

6.3

Un-Audited Audited


2020 2019

3,822,879 2,401,266

450,000 -

1,927 1,187

4,274,806 2,402,453

- - Rupees in '000 - -

15

4. SEASONALITY OF OPERATIONS

The Company is inter-alia engaged in manufacturing of sugar for which the season begins in October / November and ends in March / April. Therefore, majority of expenses are incurred and production activities are undertaken in the first half of the Company's financial year thus increasing volume of inventories, trade payables and borrowings at the end of first half.

5. TRADE AND OTHER PAYABLES

Balance as at March 31, 2020 mainly includes trade creditors aggregating Rs.688.105 million (September 30, 2019: Rs.226.106 million).

6.1 Short term finance facilities available from various commercial banks under mark-up arrangements aggregate to Rs.4.250 billion (September 30, 2019: Rs.4.390 billion). These finance facilities, during the current period, carried mark-up at the rates ranging from 3.00% to 17.12% (September 30, 2019: 3.00% to 15.91%) per annum. The aggregate finance facilities are secured against charge over plant & machinery, pledge of refined sugar in bags, charge over current assets, equitable mortgage over land & building of the Company, lien over import & export documents. These facilities are expiring on various dates by November, 2020.

6.2 The Company, during the current period, obtained short term loan amounted Rs.450 million from one of its related party Mr. Adnan Hayat Noon (sponsor) to meet its working capital requirements. This loan is interest free and is payable by the Company upon availability of funds.

6.3 This has arisen due to issuance of cheques in excess of available balance with bank.

7. CONTINGENCIES AND COMMITMENTS

There has been no significant change in the status of contingencies as detailed in note 15 to the Company's annual audited financial statements for the year ended September 30, 2019.

Aggregate commitments for rentals under Ijarah arrangement as at reporting date are as follows:

16

8.1.1 Additions during the period / year:

-

-

-

1,480

5,115

575

127

9,690

-

1,614

2,533

-

21,134

37,574

365,217

126

43,760

7,144

316

197

15,539

2,750

-

15,140

487,789

26

Buildings on freehold land:

- colony

- factory

Plant and machinery

Other equipment

Electric installations and fittings

Office equipment

Furniture and fixture

Vehicles:

- owned

- leased

Farm tractors

Farm equipment

Power project

Note

Not later than one year

Later than one year but not later than five years

Un-Audited

March 31,

2020

Audited

September 30,

2019

- - Rupees in '000 - -

2,314

1,157

3,471

3,583

4,416

7,999

8. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 8.1

Capital work-in-progress - at cost

Right-of-use assets 8.2

8.1 Operating fixed assets

Book value at the beginning of the period / year

Additions during the period / year 8.1.1

Disposal of assets costing Rs.Nil

(September 30, 2019: Rs.6.782 million) - at book value

Right-of-use assets 8.2

Depreciation charge for the period / year

Book value at the end of the period / year

1,379,616

103,988

15,546

1,499,150

1,452,618

21,134

-

(17,767)

(76,369)

1,379,616

1,452,618

26,031

-

1,478,649

1,124,636

487,789

(127)

-

(159,680)

1,452,618

8.2 Right-to-use assets

Opening balance

Transfer from operating assets

Depreciation for the period

Un-Audited Audited


2020 2019

- -

17,767 -

(2,221) -

15,546 -

9. STOCK-IN-TRADE

Raw material - molasses

Work-in-process

Finished goods

Other stocks - (fair price shop and depot)

672,052 78,364

34,518 15,332

9.1 3,236,996 1,053,302

699 290

3,944,265 1,147,288

- - Rupees in '000 - -Note

17

365,657 672,649

221,898 47,636

587,555 720,285

-

153,626

Local

Sugar

Sprit

Export

Sugar

Sprit 402,294 342,148

402,294 495,774

989,849 1,216,059

1,521,153

316,397

1,837,550

-

516,316

516,316

2,353,866

1,820,273

110,746

1,931,019

153,626

453,040

606,666

2,537,685

- - - - - - - - Rupees in '000 - - - - - - - -

March 31,

2020

March 31,

2019

March 31, March 31,

2020 2019

Quarter ended Six months period ended

9.1 Finished goods inventory mainly includes sugar stock costing Rs.2,948.417 million (September 30, 2019: Rs.981.693 million).

10. SALES - Net

10.1 Detail of the Company's revenue from contract with customers is as follows:

18

12.1 Segment revenues and results

For the Six months period ended

March 31, 2020 (Un-Audited)

Sales - net

Cost of sales

Gross profit

Selling and distribution expenses


Sugar DistilleryElimination

of inter segment

transactions

Total

- - - - - - - - - - Rupees in '000 - - - - - - - - - -

1,874,098

(1,629,468)

244,630

(19,444)

(67,947)

832,713

(618,304)

214,409

(50,236)

(24,288)

(352,945)

352,945

-

-

-

2,353,866

(1,894,827)

459,039

(69,680)

(92,235)

Profit before taxation

and unallocated income

and expenses 157,239 139,885 - 297,124

Unallocatable income

and expenses:

Other income

Other expenses

Finance cost

Taxation

Profit for the period

4,481

(6,279)

(170,353)

(32,253)

92,720

10.2 All the contracts were under one performance obligation and revenue has been recognised at the point of time when the goods have been transferred to the customers.

11. TAXATION

Provision for taxation, made during the current period, represent minimum tax payable under section 113 and final tax deducted at source on realisation of foreign exchange proceeds under section 154 of the Income Tax Ordinance, 2001.

12. SEGMENT INFORMATION

The Company's reportable segments are Sugar and Distillery.

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12.2 Segment assets and liabilities

4,309,670 1,645,845 5,955,515

745,090

6,700,605

652,591 120,070 772,661

4,955,935

5,728,596

3,082,051 926,523 4,008,574

202,880

4,211,454

413,247 23,466 436,713

2,845,900

As at March 31, 2020 (Un-Audited)Segment assets

Unallocatable assets

Total assets as per statement of financial position

Segment liabilities

Unallocatable liabilities

Total liabilities as per statement of financial position

As at September 30, 2019 (Audited)

Segment assets

Unallocatable assets

Total assets as per statement of financial position

Segment liabilities

Unallocatable liabilities

Total liabilities as per statement of financial position 3,282,613

- - - - - - - - Rupees in '000 - - - - - - - -

Sugar Distillery Total

For the Six months period ended

March 31, 2019 (Un-Audited)

Sales - net

Cost of sales

Gross profit

Selling and distribution expenses


Profit before taxation and

unallocated income and expenses

Unallocatable income and expenses:

Other income

Other expenses

Finance cost

Taxation

Profit for the period

2,280,810 563,786 (306,911) 2,537,685

(2,206,139) (336,989) 306,911 (2,236,217)

74,671 226,797 - 301,468

(7,237) (34,623) - (41,860)

(52,266) (18,064) - (70,330)

15,168 174,110 - 189,278

19,085

(4,229)

(142,133)

-

62,001

Sugar DistilleryElimination

of inter segment

transactions

Total

- - - - - - - - - - Rupees in '000 - - - - - - - - - -

Trade debts

13.2 Period / year end balances are as follows:

15,437 4,710

Un-Audited Audited


2020 2019

- - Rupees in '000 - -

Associated

Company

Relative of

director

Directors andKey management

personnel

24,932

450,000

4,634

12,156

-

-

-

11,184

Sales of sugar

Consultancy paid

Remuneration and other benefits

- - Rupees in '000 - -

Relationship Nature of transactions

Interest free loan obtained

March 31,

2019

March 31,

2020

Six months period endedUn-Audited

20

12.3 Geographical information

All segments of the Company are managed on nation-wide basis and operate manufacturing facilities and sale offices in Pakistan.

13. TRANSACTIONS WITH RELATED PARTIES

The Company has related party relationship with its Associated Companies, associated persons, employee benefit plan, its directors and key management personnel. Transactions with related parties are carried-out on arm's length basis.

13.1 Aggregate transactions with related parties, during the current period, were as follows:

14. FINANCIAL RISK MANAGEMENT

The Company's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

There has been no change in the Company's sensitivity to these risks since September 30, 2019, except for the change in exposure from liquidity risks due to increase in borrowings and general exposure due to fluctuations in foreign currency and interest rates. There have been no change in risk management objectives and policies of the Company during the current period.

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These condensed interim financial statements does not include all financial risk management information and disclosures as required in the audited annual financial statements and should be read in conjunction with the Company's annual audited financial statement as at September 30, 2019.

15. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. Underlying the definition of fair value is the presumption that the Company is a going concern and there is no intention or requirement to curtail materially the scale of its operation or to undertake a transaction on adverse terms.

Fair values categorised into different levels in a fair value hierarchy based on the inputs used in the valuation technique are as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities [Level 1].

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) [Level 2].

- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) [Level 3].

The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values.

16. CORRESPONDING FIGURES

In order to comply with the requirements of IAS 34 'Interim Financial Reporting', the condensed interim statement of financial position have been compared with the balances of annual audited financial statements of the preceding financial year, whereas, the condensed interim statement of profit or loss and other comprehensive income, condensed interim statement of cash flows and condensed interim statement of changes in equity have been compared with the balances of comparable period of the immediately preceding financial year.

17. GENERAL

17.1 These condensed interim financial statements have been authorised for issue by the Board of Directors of the Company on May 28, 2020.

17.2 Figures have been rounded off to the nearest thousand except stated otherwise.

17.3 On March 11, 2020, the World Health Organization declared Coronavirus disease (COVID-19) a pandemic, and its spread has gained momentum. As at March 31, 2020, COVID-19 has spread throughout the country and lockdowns have been imposed in

22

most parts of the country. The measures taken to reduce the spread have resulted in an overall economic slowdown and disruptions to various businesses. The Government of Pakistan and State Bank of Pakistan have announced several monetary and fiscal policy measures to mitigate the adverse economic impacts of the COVID-19.

The aforementioned measures have also affected the business operations of the Company significantly in the form of disruption to normal course of business. The extent and duration of such impacts remain uncertain and are dependent on future developments that cannot be accurately predicted at this time. Given the ongoing economic uncertainty and evolving situation at the time of issuing these condensed interim financial statements, the overall impact on the Company’s financial position cannot be estimated with reasonable certainty.



M. SOHAIL KHOKHAR

23

28 :2020

COVID

175

48,217

9,629

250

24

105

543,477

52,788

9.71

4.48

24,341

contents · lt col abdul khaliq khan (retd) m. sohail khokhar director lahore: may 28, 2020 for and...

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